Jerusalem is Israel's largest city and its declared capital. It is a holy city for Jews, Christians, and Muslims. In 1947, when the United Nations voted to partition Palestine into a Jewish state and an Arab state, Jerusalem was to be internationalized. However, the city was divided between Jordan (East Jerusalem, including the walled old city) and Israel (West Jerusalem, the new city) during Israel's War of Independence (1948—49). Israel made its portion of Jerusalem its capital. Nevertheless, most countries did not accept that decision, and many retained their embassies in Tel Aviv. In the Six-Day War (1967) Israel gained control of East Jerusalem and merged it with the western portion of the city.
On 30 July 1980, the Knesset passed the Basic Law: Jerusalem, Capital of Israel, 5740-1980, which declared the following: Jerusalem united in its entirety is the capital of Israel. Jerusalem is the seat of the President of the State, the Knesset, the Government and the Supreme Court. The Holy Places shall be protected from desecration and any other violation and from anything likely to violate the freedom of access of the members of the different religions to the places sacred to them or their feelings with regard to those places. The law also provided that the government would work for the development and prosperity of the city and the welfare of its inhabitants and would give special priority to this activity.
West Jerusalem is the modern part of the city. East Jerusalem includes the walled old city, the site of many ancient holy places. Among prominent holy places are the Western Wall (Wailing Wall) and the Church of the Holy Sepulcher (which is believed to stand on the hill of Calvary, or Golgotha, where Jesus was crucified and buried). The church is shared by several Christian sects, who believe that many events in Jesus' life took place in Jerusalem. The Dome of the Rock (which stands near the Wailing Wall) was built over the rock from which, according to Muslim belief, Muhammed rose to heaven. For Muslims, Jerusalem is the third holiest city in Islam after Mecca and Medina in Saudi Arabia. In Jewish tradition, it was at the Dome of the Rock that Abraham prepared to sacrifice his son Isaac as God commanded (the Akeda). This area is generally referred to as the Temple Mount. Jews also consider Jerusalem a holy city because it was their political and religious center in biblical times. About 1000 BC, King David made Jerusalem the capital of the united Israelite tribes. David's son, King Solomon, built the first Temple of the Jews in the city.
In the Oslo Accords, Israel and the Palestine Liberation Organization (PLO) agreed to defer discussions about Jerusalem until the "final status" stage of negotiations. In the Israel-Jordan Peace Treaty (1994), it was agreed that Jordanian interests in Jerusalem's Muslim holy places would be taken into account in a final settlement affecting the city.
At the Camp David II negotiations (July 2000), Israel's Ehud Barak proposed to transfer Arab-dominated areas of eastern Jerusalem to the Palestinians and to share sovereignty in the old city and over the religiously sensitive Temple Mount. This offer was rejected by Palestinian leader Yasser Arafat, who demanded exclusive Palestinian sovereignty and reportedly questioned any Jewish religious or historical attachment to Jerusalem. At the subsequent Taba talks, President William J. (Bill) Clinton of the United States put forward a "bridging proposal" whereby the Palestinians would have sovereignty "on" the Temple Mount while Israel would have sovereignty "under" the Temple Mount (where the ancient archaeological artifacts, including elements of the original temple, are believed to be found). This controversial proposal was accepted in principle by Barak but rejected by Arafat.
Since the first modern census in the mid-19th century, Jews have constituted the majority of Jerusalem's population. Jerusalem's population in 2007 stood at 733,300 — some 64 percent Jewish, 33 percent Muslim, and 2 percent Christian.
Historical Dictionary of Israel. Bernard Reich David H. Goldberg. Edited by Jon Woronoff..